Estimating Total Program Time

In order to calculate the probability of completing the project on time, the standard deviations of each activity must be known. This can be found from the expression:

te 6

7. It is assumed that the functional manager performs all of the estimating. The reader should be aware that there are exceptions where the program or project office would do their own estimating.

8. See F. S. Hillier and G. J. Lieberman, Introduction to Operations Research (San Francisco: Holden-Day, 1967), p. 229.



FIGURE 12-15. Expected time analysis for critical path events in Figure 12-6.

where ate is the standard deviation of the expected time, te. Another useful expression is the variance, u, which is the square of the standard deviation. The variance is primarily useful for comparison to the expected values. However, the standard deviation can be used just as easily, except that we must identify whether it is a one, two, or three sigma limit deviation. Figure 12-15 shows the critical path of Figure 12-6, together with the corresponding values from which the expected times were calculated, as well as the standard deviations. The total path standard deviation is calculated by the square root of the sum of the squares of the activity standard deviations using the following expression:


Before we continue, it is necessary to discuss the methodology for preparing PERT schedules. PERT scheduling is a six-step process. Steps one and two begin with the project manager laying out a list of activities to be performed and then placing these activities in order of precedence, thus identifying the interrelationships. These charts drawn by the project manager are called either logic charts, arrow diagrams, work flow, or simply networks. The arrow diagrams will look like Figure 12-6 with two exceptions: The activity time is not identified, and neither is the critical path.

Step three is reviewing the arrow diagrams with the line managers (i.e., the true experts) in order to obtain their assurance that neither too many nor too few activities are identified, and that the interrelationships are correct.

In step four the functional manager converts the arrow diagram to a PERT chart by identifying the time duration for each activity. It should be noted here that the time estimates that the line managers provide are based on the assumption of unlimited resources because the calendar dates have not yet been defined.

Step five is the first iteration on the critical path. It is here that the project manager looks at the critical calendar dates in the definition of the project's requirements. If the critical path does not satisfy the calendar requirements, then the project manager must try to shorten the critical path using methods explained in Section 12.3 or by asking the line managers to take the "fat" out of their estimates.

Step six is often the most overlooked step. Here the project manager places calendar dates on each event in the PERT chart, thus converting from planning under unlimited resources to planning with limited resources. Even though the line manager has given you a time estimate, there is no guarantee that the correct resources will be available when needed. That is why this step is crucial. If the line manager cannot commit to the calendar dates, then replanning will be necessary. Most companies that survive on competitive bidding lay out proposal schedules based on unlimited resources. After contract award, the schedules are analyzed again because the company now has limited resources. After all, how can a company bid on three contracts simultaneously and put a detailed schedule into each proposal if it is not sure how many contracts, if any, it will win? For this reason customers require that formal project plans and schedules be provided thirty to ninety days after contract award.

Finally, PERT replanning should be an ongoing function during project execution. The best project managers continually try to assess what can go wrong and perform perturbation analysis on the schedule. (This should be obvious because the constraints and objectives of the project can change during execution.) Primary objectives on a schedule are:

Secondary objectives include:

• Studying alternatives

• Optimum schedules

• Effective use of resources

• Communications

• Refinement of the estimating process

• Ease of project control

• Ease of time or cost revisions

Obviously, these objectives are limited by such constraints as:

• Calendar completion

• Cash or cash flow restrictions

• Limited resources

• Management approvals

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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